Crossrail’s arrival will help create a Knowledge Corridor linking Bloomsbury’s world-class education facilities; Fitzrovia and Marylebone’s vibrant office markets and Paddington’s development potential. The area already has a high and growing concentration of the knowledge-intensive business sectors that will drive London's growth over the next decade and beyond. The arrival of Facebook in Fitzrovia strengthens this mix even further. With a host of other transport, infrastructure and street improvements to come, the corridor's strengths will become more apparent and rents will rise more quickly than the west end average.
To find out more, navigate the boxes or request the JLL report. You can also view our interactive map and get an insight into this dynamic area from on-the-ground developers.
There are a swathe of public realm improvements planned across the corridor, most notably Camden's West End Project, which will add new public spaces and improve the pedestrian experience around Tottenham Court Road and Gower Street. Similar, if less extensive, plans are in place further west around Baker Street, Gloucester Place and Edgware Road. These improvements will help attract office, retail and leisure occupiers, while removing the barriers between adjacent submarkets, making the whole corridor feel more permeable to pedestrians.
They are places where "leading-edge anchor institutions and companies cluster and connect with start-ups, business incubators and accelerators. They are also physically compact, transit-accessible, and technically-wired and offer mixed-use housing, office and retail."
"[They] are the manifestation of mega-trends altering the location preferences of people and firms… re-conceiving the very link between economy shaping, place making and social networking."
"Our most creative institutions, firms and workers crave proximity so that ideas and knowledge can be transferred more quickly and seamlessly."
Bruce Katz, Brookings Institute
British Land's Head of Office Investment, Charlie Butters, explains the strategy behind the Paddington deals.
Q: Why have you invested so much in Paddington? What do you see as the long-term opportunity?We are focussed on office estates, where we can control a wide area, including the public realm, and there is sufficient critical mass. This allows us to provide precisely the environment that appeals to office occupiers. With one single building, you have no influence over what happens outside. We have adopted a similar approach on the other side of Central London, at Broadgate, which is also connected to Crossrail, as well as at Regent's Place.
Q: Speaking of Crossrail, what effect do you think the scheme will have?Some would argue that it is a threat to Paddington, but that does not make sense. Where else in the West End can you find large footplate buildings at relatively cost-effective rents? And given its position and connections, close to Heathrow and the Western Corridor, it will always be attractive to corporates looking for an accessible Central London HQ location.
Q: What are you more specific plans for Paddington Central?The area was devised almost as an out-of-town business park, in town. The entrance faces the road, assuming people will arrive by car or taxi. We need to reorientate it towards the canal and make more of that frontage, while improving the retail and amenity offer. There is also a need to integrate it more into the rest of the area, which will be helped by other schemes.
Q: What do you think the long-term prospects are for rental growth?There will always be a differential between rents here and the prime West End. With the arrival of Crossrail, and improvements to the wider offer here, there is no reason why rents could not rise to the levels we have seen at Regent's Place.
Simon Silver, Director at Derwent London, discusses how he sees this area developing.
Q: Do you see Crossrail as an opportunity here? Or is it more of an advantage for the more fringe markets ?Although central London is already well connected, Crossrail will significantly improve the capital's east-west connectivity. While we believe that the fringe areas will see a notable benefit of being close to a Crossrail station, occupier demand is focused on the areas of central London near the new stations and these locations have already witnessed tremendous growth and are well underway with large scale regeneration, especially around Tottenham Court Road and Farringdon stations. If you look at where a lot of our buildings are, around Clerkenwell and Fitzrovia, you can see that we are very bought into the Crossrail story. For instance, close to Farringdon station, we have recently completed two major projects at Turnmill and The Buckley Building and have acquired two new medium term development opportunities at 20 Farringdon Road and 19 Charterhouse Street, both opposite the new Crossrail entrance.
Q: How will Crossrail change the area?We are already seeing the areas improve. Back in 2010, office rents at Stephen Street were £34 per sq ft. This year alone our refurbished space has been let to tenants such as The Office Group, Freud Communications and FremantleMedia at £65 per sq ft whilst the upper two floors of 1 Stephen Street were let to a private equity firm at over £80 per sq ft. That demonstrates how much it has changed already. Occupiers recognise the improved accessibility from Crossrail, while retailers understand the sheer volume of people who will use the station – it is comparable to Heathrow Airport. You could also look at how a company like Estée Lauder has chosen Fitzroy Place for its headquarters – and how hedge funds are starting to take space in the area. Certainly, having a W1 postcode helps.
Q: How will the improvements to Tottenham Court Road help the office market?Occupiers are obsessed with the ‘war for talent', but we have always recognised the importance of the office environment. Our buildings demonstrate that: high-quality, attractive, individual buildings with appeal that reaches far beyond the media and tech sectors. However, the wider public realm, streetscape, and retail and amenity offer is also important – and the changes proposed can only help attract office occupiers, investors and developers.
Q: And how is the retail picture changing?On Tottenham Court Road, you're seeing retailers like Space NK opening at our Qube property and quality restaurants moving into the modern space we have provided at Tottenham Court Walk. That sort of trend will strengthen with time as retailers realise the scale of footfall around the Crossrail station.
Q: Are there opportunities east of Tottenham Court Road, into Bloomsbury?Bloomsbury is obviously a very attractive and interesting area but it is dominated by more period-style buildings and feels more staid compared to the areas around it. That might gradually change as the area further west becomes more dynamic.
Q: You are also developing a building at Paddington – this seems a little out of your core area. Can you explain your strategy there?Paddington has attracted some very interesting tenants over the past few years, particularly in the tech space. However, the stock is mostly generic grade A stock. We will be delivering a more interesting project into the area – a ‘real Derwent building' that will appeal to a broad range of occupiers, not just creative companies, who want well-designed workplaces that encourage productivity and employee satisfaction. Our site is in effect No. 1 Paddington, opposite the new station entrance and linking both sides of the Paddington regeneration area. Together with the investment British Land will be making, we believe there will be major improvements in the area.
Oliver Fenn-Smith, Property Director, The Portman Estate
Q: Can you describe the Portman Estate and its boundaries?The estate covers about 110 acres, between Oxford Street, Edgware Road and Manchester Square. Our properties are roughly 1/3 offices, 1/3 residential and 1/3 retail and hotels. The Portman family, who were originally from the West Country, purchased the land in 1532. It was only 200 years later, during the Georgian period, that it was developed. The Estate is now held in trust for the wider family, with over 130 beneficiaries, although the ancestral title is held by Viscount Portman who leads the management company, Portman Settled Estates Limited.
Q: Can you tell me a bit about your current strategy?The current Viscount has adopted a proactive strategy of reinvesting in the Estate. While we want to maintain the balance of uses, we are actively purchasing long leaseholds where we can, influencing the retail frontages, investing in the public realm, refurbishing the properties and improving the character of the area. The prototype, I suppose, is what we have achieved at Seymour Place and New Quebec Street – which we call Portman Village. The idea is to provide a better mix of independent and high-quality retail and leisure – for example the Grazing Goat pub and restaurant. This should boost demand for other uses.
Q: Are hotels an important part of the estate?Absolutely – we have 32 hotels within our boundaries, including some cutting-edge luxury operations. The most obvious is Andre Balazs' Chiltern Firehouse, which is also justly famous as a restaurant. There is also the Zetter Group's Marylebone Townhouse, and Z hotels will soon be joining the list. We have worked very hard to make sure we have the right brands and businesses in the area.
Q: The architectural quality and vibrancy of the estate is very obvious – but what else is being done to improve its look and feel?We are working with the Baker Street Quarter, the local Business Improvement District (BID), to improve the street environment at Baker Street – widening the pavements, making it two-way and improving the junctions with side streets. There are similar plans for Gloucester Place, which is actually a very attractive street with strong demand for offices and retail, but which could do even better if it were not so traffic-dominated.
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British Land's Head of Office Investment, Charlie Butters, explains the strategy behind the Paddington deals. Read more
Derwent London has over one million sq ft of major schemes either on-site or with planning consent across the corridor. Simon Silver, Director Derwent London, explains why these areas are so promising. Read more
The Portman Estate covers c.110 acres, between Oxford Street, Edgware Road and Manchester Square. Oliver Fenn-Smith, Property Director from the Portman Estate talks to us about their strategy. Read more